The Zacks Analyst Blog Highlights: Nokia, Microsoft, Qualcomm, Apple and Amazon.com

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Mar 14, 2012, 09:30 ET

CHICAGO, March 14, 2012 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include Nokia (NYSE: NOK), Microsoft Corporation (Nasdaq: MSFT), Qualcomm Inc. (Nasdaq: QCOM), Apple Inc (Nasdaq: AAPL) and Amazon.com Inc. (Nasdaq: AMZN).

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Here are highlights from Tuesday's Analyst Blog:

A Hurdle for Nokia's Christmas Launch

Going by the recent market buzz, Nokia (NYSE: NOK) is set to launch its Window 8-based tablets this Christmas.

Following their successful smartphone venture, both Nokia and Microsoft Corporation (Nasdaq: MSFT) are eyeing the lucrative tablet market, which is showing signs of significant growth. The tablet market has grown by 150% since last year. So in order to seize the opportunity, the company plans to launch the Window 8-based tablets by the end of fiscal 2012.

The new 10-inch tablet will be based on latest Windows 8 platform and powered by Qualcomm Inc.'s (Nasdaq: QCOM) Snapdragon processor, which supports better battery life and high quality HD videos. It is also believed that Taiwan-based manufacturing firm Compal Electronics has gained 200,000 tablets contract from Nokia.

Earlier, in November, 2011, Nokia launched its Window-based Lumia series of smartphones. So going by this trend it is highly anticipated that the company will also release its new tablet device during that period of the year, which happens to be one of the profitable months for all electronic device manufacturers.

However, we believe that the launch of Windows 8-based tablets will have less impact on Nokia's market share due to the following reasons. Firstly, Nokia is a late entrant in the tablet market, which is currently dominated by Apple Inc's (Nasdaq: AAPL) iPad (58% market share). By the time Nokia will launch its tablet, iPad 3 will establish its strong foothold in different markets across the world.

Secondly, Nokia boasts a strong presence in emerging countries. These emerging countries remain highly price sensitive, so delay in the product launch will allow Amazon.com Inc.'s (Nasdaq: AMZN) low-budget Kindle Fire tablets costing just $199, to gain huge market traction, hence putting more pressure on Nokia's market share.

Thirdly, tablet market is growing by leaps and bounds, so in order join the bandwagon; most companies will be launching their tablets in the upcoming quarters. Moreover, other companies will be launching their most advanced tablets, which we believe will further increase competition going forward.

We maintain our long-term Neutral recommendation for Nokia. Currently, Nokia has a Zacks #3 Rank, implying a short-term Hold rating on the stock.

Our View

We believe that higher proliferation of tablet sales has prompted Nokia to enter the tablet market. As per the IHS iSuppli Application Market Forecast, tablet devices are currently ranked at the eight spot in the overall consumer electronics goods segment and are expected to jump to fifth spot in fiscal 2012.

Growing market trends influenced Nokia to target the tablet market to mitigate its deteriorating sales and regain its lost market share.

Based in Espoo, Finland, Nokia Corporation is the largest mobile phone maker of the world. The company also provides Internet services, comprehensive digital map information, and equipment, solutions and services throughout the world.

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